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Thursday, 26 November 1959

Mr POLLARD (Lalor) .- I rise mainly to take this opportunity, because this clause is the financial centre of the amendments, to say quite clearly to the Minister for Trade (Mr. McEwen) that the suggestion that the corporation ought to be able to operate on the strength of a government guarantee appears, in my opinion, to have no relation to Douglas Credit policy whatsoever. I frankly admit that, after many endeavours, I was never able to understand Douglas Credit, and to attempt to describe any of my arguments as Douglas Credit is altogether too extraordinary.

But I think it can still be argued that any instrumentality, backed in its operations by a government guarantee and which earns satisfactory revenue, might well engage in business. AH I am trying to point out is that the soundness of the argument of my colleague, the honorable member for Melbourne Ports (Mr. Crean), holds good. The £1,000,000 is, in effect, a sort of subsidy. It brings to the cor poration a return of £40,000. It is, indeed, working capital, a handy amount of revenue which can be used for expenses until such time as the corporation earns sufficient revenue from its operations to cover all its outgoings. It is doing that now. But the fact that it can bring in £40,000 annually gives it the strength which, in the end result, must keep down the premiums of the exporters whom it is supporting financially.

As a matter of government policy, a subsidy donation is sound and we are not objecting to it; but the argument that the instrumentality cannot work without having £1,000,000 in cash does not hold water. I do not pose as a financial authority, but as long as I can remember I have been reading on the windows of the State Savings Bank of Victoria the words " Guaranteed by the Government of Victoria ". But I do not think that bank has a threepenny bit in its till invested by the Government of Victoria. On the contrary, the Government of Victoria has, I suppose, 75 per cent, of that bank's money being utilized in government operations.

The other illustration is that the Government of which the Minister is a distinguished member - we cannot rob him of that credit - has guaranteed Ansett-A.N.A. Proprietary Limited £4,000,000 or perhaps £6,000,000-1 have forgotten the actual figure. That is a notorious arrangement.

I do not think that even the Minister will contend that Ansett-A.N.A. got £6,000,000 from the Government, in cash. But on the strength of the guarantee of the Government Ansett-A.N.A. was able to go to the banking institutions or elsewhere for financial accommodation, using the guarantee as a proof of its own soundness. Similarly, it would be able to buy aircraft from the manufacturers on good terms. So when the Minister pooh-poohs our statements, I say to him that essentially this corporation is not actually getting from the Government a cash amount of £1,000,000 in order to enable it to operate. I believe that it can be worked on the other basis - that of a Government guarantee. I may be wrong, but I put that point of view to let people know that there is another story.

I contend again that the argument of my colleague is perfectly sound when he says that, in effect, this instrumentality is being provided with something in the nature of a subsidy, which will enable it to charge lower premiums to people doing business with it than would otherwise be the case. That fact ought to be stated frankly. We are not objecting to it, and I do not think that the Minister would contest the point we make.

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